Saturday, January 25, 2014

Epilogue by Jeff Furman, Chairman of the Board of Directors of Ben & Jerry’s

ISBN 978-1-60994-813-9

Published by Berrett Koehler, January 2014

Description

The Struggle for the Soul of Ben & Jerry’s is the first book to tell the complete story of a beloved company’s inspiring rise, tragic mistakes, devastating fall, determined recovery, and ongoing renewal. For over three decades, Ben & Jerry’s has tried to achieve “linked prosperity,” or the idea that the owners of the company should share their success with all of their stakeholders — employees, suppliers, distributors, customers, cows, everybody. Living up to this ideal is fun when you’re doing it right, and it creates amazingly loyal customers, but it isn't easy.

Commentary

As a self-confessed ice-cream addict, it was more than obvious that I would want to read and review this book. Also, as a former Unilever employee, I have an additional connection to the Ben & Jerry's story. Add that to the CSR and social business theme, and you couldn't find a book that I could connect with on any more levels. More than this, the book reads like a who's who of the history of the CSR movement in the U.S. with all the big names – Paul Hawken, Anita Roddick, Simon Zadek and more – who played a role in the rise, struggles, challenges, development of, and survival of, the legendary Ben & Jerry's ice cream business.
The story of Ben & Jerry's is recounted by journalist Brad Edmondson, whose many hours researching and interviewing past and present Ben & Jerry's protagonists is evident in the depth of the narrative. Actually, this book provides a background that I suspect many don't know, and insights which put a new perspective on the amazing journey to a leading ice cream brand and the concept of linked prosperity.

Linked Prosperity

I hadn’t come across this term before, although it resonates which my impression of how the Ben & Jerry's operation was run. Linked prosperity is the "simple but radical idea that when the company benefits, everything it touches should also benefit, including employees, suppliers, customers communities and the environment." Today, that concept is well-known, but back in the 80s, it was far less common. A couple of the first expressions of linked prosperity that many perhaps do not know include the creation of the Ben & Jerry's Foundation as a way of channelling 7.5% of pretax profits (nearly four times the national average) to social causes and the introduction of a salary ratio of five to one between the highest and the lowest salaries. The prosperity of Ben and Jerry's was also directly linked to its local community through a share offering restricted only to Vermont residents, so that in 1984, after the first offering, "nearly 1% of the households in the state owned shares of Ben & Jerry's". One of the first cause marketing campaigns undertaken by Ben & Jerry's was the sale of Peace Pops, under the One Percent for Peace banner, a new organization supported by Paul Hawken and other visionaries to rechannel 1% of the U.S. defense budget to cultural and economic exchanges between the U.S. and the Soviet Union.

The Three Part Mission and the Challenges of Pioneering CSR

In 1988, Ben & Jerry's unveiled its social, economic and product centric three-part mission, a precursor to the triple bottom line we all are familiar with today. Later, the company started to include non-financial disclosures in annual reports and gradually progressed to fully audited social accounts. In the book, Brad Edmondson describes the risks that this pioneering approach brought for Ben & Jerry's, alongside the detail of the challenges of performing full social audits and paving the way, by establishing new methodologies, so that larger companies such as Disney and Nike could move into this space as well. This significant role that Ben & Jerry's played in moving CSR forward is probably not widely known and it makes for absolutely fascinating reading. The path to sustainable sourcing was also not as smooth as the new range of sorbets that Ben & Jerry's brought out to compete with Hagen Dasz in 1996. Fair trade vanilla farmers in Costa Rica became a less reliable source and alternatives had to be found. The apple-pie social enterprise source La Soul sued Ben & Jerry's when apple-pie flavored frozen yogurt didn't sell.
Other challenges that plagued Ben & Jerry's included finding the right leadership, especially when the company was under financial pressure in the 90s, and this was so much harder given the founders' determination to give equal weighting to each part of the Ben & Jerry's three-part mission. Ironically, Perry Odak, the externally-hired CEO in the late 1990s, whose belief was "let's make the economics work first" and who started to try to quantify the incremental costs of the social mission for the first time, was the one who managed to save the Ben & Jerry's balance sheet. But he was also the one who is attributed with moving the company towards its historic sale to Unilever.

Selling Out?

And this is probably the part of the book that almost every wants to read first (though it's much better if you take in the first eight chapters before you do). What really went on behind the scenes that led to the iconic socially-led progressive premium ice cream small-guy Ben &Jerry's to be gobbled up by the global powerhouse Unilever is the big attraction of this book. We all recognize that today, Ben & Jerry's largely survived the Unilever gobble-up, and emerged with its values, creativity, social identity, great flavors and even a little of its irreverence as a brand intact. How Ben & Jerry's managed to do this in the face of Big Business is the most compelling part of this book, even before you read it. Chapter Nine is where the stakes are upped. The account doesn't disappoint. Albeit containing less drama, door-slamming and storming-out of meetings than we might have anticipated, the sale negotiation process was not without its ups and downs and the roles of the different characters involved on both sides is illuminating, and shows, ultimately, they even Big Business is about people with values and their determination to make things happen.

Happy End

Ben & Jerry's secured terms for this acquisition deal which helped preserve much of its character and a good degree of its independence, even though, down the road, the company would have to take Unilever to hand for breaching the agreed provisions. Eventually, after Paul Polman took the helm at Unilever, and brought with him a great focus on strategic CSR and a new openness, the path to a cautious rebalancing of the three-part mission became navigable. In urging Unilever to take on greater sustainability goals, Polman cited Ben & Jerry's as one of the model companies in the Unilever family in terms of championing social environmental causes and others confirmed they sought to learn from Ben & Jerry's in areas of sustainable sourcing and fair trade. Ben & Jerry's had come full circle, and the founding partners could continue to feel proud of the institution they had developed, despite the devastating feeling of having sold their company.

A Book Worth Reading

There is much more to this book than I expected, and if anything, one of the greatest insights is that it is really no picnic trying to be a socially responsible company and thrive. The five to one salary ratio disappeared when it became untenable, the costs of sustainable sourcing almost bankrupted the business, and the relationships between board and management became strained beyond measure. The ability of Ben & Jerry's to survive and grow through all of this is as much due to the perseverance of principle in general, allowing some flexibility of principles in practice, as it is to a smart group of people who appeared in the right place at the right time to make the right decisions, powered by a vision of linked prosperity, the spirit to see it through and a shared sense of the inevitability great-tasting ice cream with a backbone.

There's only one secret that Brad Edmondson didn't reveal about Ben & Jerry's – and that's how to get membership of the Free Ice Cream for Life Club. Now THAT's something I'd like to know.